Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.2.2
Leases
6 Months Ended
Oct. 31, 2022
Leases [Abstract]  
Leases Leases The Company determines if a contract contains a lease at inception. The Company has entered into operating leases totaling approximately 172,021 square feet of office and classroom space in Phoenix, San Diego, New York City, Denver, Austin, Tampa, Nashville, Atlanta and the New Brunswick Province in Canada. These leases expire at various dates through April 2031, and the majority contain annual base rent escalation clauses. Most of these leases include options to extend for additional five-year periods. Since it is not reasonably certain that the leases would be renewed, the Company does not consider the renewal option in the lease term. As permitted by ASC 842, leases with an initial term of twelve months or less are not recorded on the accompanying consolidated balance sheet. The Company does not have any financing leases.
As of October 31, 2022, our longer-term operating leases are located in Tampa, Phoenix, Austin, Nashville and Georgia and are set to expire in six to eight years. These leases make up approximately 94% of the total future minimum lease payments.
Operating lease ROU assets, which represent the right to use an underlying asset for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in "Operating lease right- of-use assets, net", "Operating lease obligations, current portion" and "Operating lease obligations, less current portion" in the consolidated balance sheets at October 31, 2022 and April 30, 2022. These assets and lease liabilities are recognized based on the present value of remaining lease payments over the lease term. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate of 12% to determine the present value of the lease payments.
Lease incentives are deducted from the ROU assets. Incentives such as tenant improvement allowances are amortized as leasehold improvements, separately, over the life of the lease term. For the three and six months ended October 31, 2022, the amortization expense for these leasehold improvements was $185,245 and $358,943, respectively. For the three and six months ended October 31, 2021, the amortization expense for these leasehold improvements was $152,500 and $302,887, respectively.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for the three and six months ended October 31, 2022 was $1,081,187 and $2,091,699, respectively, which is included in general and administrative expenses in the consolidated statements of operations. Lease expense for the three and six months ended October 31, 2021 was $916,435 and $1,853,172, respectively.
ROU assets are summarized below:
October 31, 2022 April 30, 2022
ROU assets - Operating facility leases $ 18,527,970  $ 15,958,721 
Less: accumulated amortization (4,256,489) (3,312,771)
Total ROU assets $ 14,271,481  $ 12,645,950 

Operating lease obligations, related to the ROU assets are summarized below:
October 31, 2022 April 30, 2022
Total lease liabilities $ 25,544,191  $ 22,517,355 
Reduction of lease liabilities (4,884,300) (3,671,466)
Total operating lease obligations $ 20,659,891  $ 18,845,889 
The following is a schedule by future minimum lease payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of October 31, 2022 (by fiscal year).
Maturity of Lease Obligations Lease Payments
2023 (remaining) $ 2,219,203 
2024 4,739,252 
2025 4,547,151 
2026 4,677,145 
2027 4,782,909 
Thereafter 9,727,292 
Total future minimum lease payments 30,692,952 
    Less: imputed interest (10,033,061)
Present value of operating lease liabilities $ 20,659,891 
Balance Sheet Classification October 31, 2022 April 30, 2022
Operating lease obligations, current portion $ 2,204,342  $ 2,036,570 
Operating lease obligations, less current portion 18,455,549  16,809,319 
Total operating lease obligations $ 20,659,891  $ 18,845,889 

Other Information October 31, 2022 April 30, 2022
Weighted average remaining lease term (in years) 6.45 6.81
Weighted average discount rate 12  % 12  %